1. Decision-making efficiency is reduced: excessive dispersion of equity may lead to too many shareholders, and the decision-making process becomes complicated and time-consuming. Each shareholder may have different views on the strategic direction and management of the company, which makes it difficult to reach an understanding in decision-making and reduces the efficiency of the company's decision-making.
2. Increased pressure on management: Excessive dispersion of equity may lead management to face the interests of multiple shareholders and need to balance various interests. This may lead to the interference of management's decision-making and the inability to focus on the long-term development of the company.
3. Reduced shareholder enthusiasm: Too scattered shares may lead to limited influence of a single shareholder on the company, which may reduce the enthusiasm of shareholders to participate in company affairs. This may weaken the shareholder supervision mechanism of the company and affect the corporate governance effect.
4. Risk of hostile takeover: Excessive dispersion of equity may make the company easy to become the target of hostile takeover. Due to the dispersion of shares, malicious acquirers may gradually gain control of the company by buying shares in the market, which threatens the original management and business strategy of the company.
5. Decline in investment stability: Too scattered equity may affect investors' confidence in the company and think that the company lacks clear leaders. This may lead to increased stock price volatility, which will affect the company's market image and investment stability.
Of course, moderate dispersion of equity also has its advantages, such as reducing the control risk of major shareholders. Therefore, the degree of equity diversification needs to be weighed according to the specific situation of the company in order to achieve the best corporate governance effect.